Annaly Capital Management Stock (NYSE: NLY)

Annaly Capital Management (NYSE:NLY) Stock, Quote.Headers.trade-ideas

Annaly Capital Management

Annaly Capital Management Inc is an American mortgage real estate investment trust. The Company owns a portfolio of real estate related investments, including mortgage pass-through certificates, collateralized mortgage obligations, credit risk transfer securities, other securities representing interests in or obligations backed by pools of mortgage loans, residential mortgage loans and mortgage servicing rights. Its business objective is to generate net income for distribution to its stockholders and optimize its returns through prudent management of its diversified investment strategies. The Company's three investment groups are comprised of the following: Annaly Agency Group, Annaly Residential Credit Group, Annaly Mortgage Servicing Rights Group.

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iShares FTSE NAREIT Mortgage PLUS Capped Index Fund

Mortgage rates are falling, driving demand for refinancing and buying. The average 30-year fixed rate is now 6.09%, down from 7.19% last year.

Mortgage Rates Near 6%, Demand Increases For Refinancing, Purchases

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AGNC

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AGNC Investment Corp. (NASDAQ: AGNC) is in the limelight with the Federal Reserve&#39;s decision to begin an interest rate cut this month. The Fed has kept its influential lending rate at its highest level at 5.25-5.50% since 2001 to tame inflation. The inflation has been gradually cooling down.

Fed Rate Cut Round the Corner: Should You Make a Bet on AGNC Stock?

Arbor Realty Trust (NYSE: ABR) —  a multi-family mREIT company —  is in the limelight with the recent decline in mortgage rates. Mortgage rates fell to their lowest level in over a year, a positive development for the housing market. 

Should You Buy Arbor Realty Stock as Mortgage Rates Fall?

Annaly Capital Management Inc. Common Stock

Annaly Capital Management Inc

Annaly Capital Management Inc 6.95% Series F

Annaly Capital Management Inc 6.50% Series G Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

Annaly Capital Management Inc 6.750% Series I Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock

Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) has been analyzed by 4 analysts in the last three months, revealing a diverse range of perspectives from bullish to bearish.
The table below provides a snapshot of their recent ratings, showcasing how sentiments have evolved over the past 30 days and comparing them to the preceding months.
<table>
<thead>
<tr>
<th></th>
<th style="text-align: right;">Bullish</th>
<th style="text-align: right;">Somewhat Bullish</th>
<th style="text-align: right;">Indifferent</th>
<th style="text-align: right;">Somewhat Bearish</th>
<th style="text-align: right;">Bearish</th>
</tr>
</thead>
<tbody>
<tr>
<td>Total Ratings</td>
<td style="text-align: right;">2</td>
<td style="text-align: right;">2</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td>Last 30D</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td>1M Ago</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td>2M Ago</td>
<td style="text-align: right;">2</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td>3M Ago</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
</tbody>
</table>
Analysts' evaluations of 12-month price targets offer additional insights, showcasing an average target of $22.12, with a high estimate of $23.50 and a low estimate of $21.00. This current average reflects an increase of 7.9% from the previous average price target of $20.50. 
<img src="https://www.benzinga.com/files/images/story/2024/1726837252_0.png" alt="price target chart" />
<h2>Interpreting Analyst Ratings: A Closer Look</h2>
In examining recent analyst actions, we gain insights into how financial experts perceive Annaly Capital Management. The following summary outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.
<table>
<thead>
<tr>
<th>Analyst</th>
<th>Analyst Firm</th>
<th>Action Taken</th>
<th>Rating</th>
<th>Current Price Target</th>
<th>Prior Price Target</th>
</tr>
</thead>
<tbody>
<tr>
<td>Donald Fandetti</td>
<td>Wells Fargo</td>
<td>Raises</td>
<td>Overweight</td>
<td>$23.00</td>
<td>$19.00</td>
</tr>
<tr>
<td>Merrill Ross</td>
<td>Compass Point</td>
<td>Raises</td>
<td>Buy</td>
<td>$23.50</td>
<td>$22.00</td>
</tr>
<tr>
<td>Jason Weaver</td>
<td>Jones Trading</td>
<td>Maintains</td>
<td>Buy</td>
<td>$21.00</td>
<td>$21.00</td>
</tr>
<tr>
<td>Richard Shane</td>
<td>JP Morgan</td>
<td>Raises</td>
<td>Overweight</td>
<td>$21.00</td>
<td>$20.00</td>
</tr>
</tbody>
</table>
<h3>Key Insights:</h3>
<ul>
<li>Action Taken: Analysts respond to changes in market conditions and company performance, frequently updating their recommendations. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their reaction to recent developments related to Annaly Capital Management. This information offers a snapshot of how analysts perceive the current state of the company.</li>
<li>Rating: Offering a comprehensive view, analysts assess stocks qualitatively, spanning from 'Outperform' to 'Underperform'. These ratings convey expectations for the relative performance of Annaly Capital Management compared to the broader market.</li>
<li>Price Targets: Analysts provide insights into price targets, offering estimates for the future value of Annaly Capital Management's stock. This comparison reveals trends in analysts' expectations over time.</li>
</ul>
Understanding these analyst evaluations alongside key financial indicators can offer valuable insights into Annaly Capital Management's market standing. Stay informed and make well-considered decisions with our Ratings Table.
<a href="https://www.benzinga.com/quote/NLY/analyst-ratings?utm_source=Benzinga Insights">Stay up to date on Annaly Capital Management analyst ratings.</a>
<h2>All You Need to Know About Annaly Capital Management</h2>
Annaly Capital Management Inc is an American mortgage real estate investment trust. The Company owns a portfolio of real estate related investments, including mortgage pass-through certificates, collateralized mortgage obligations, credit risk transfer securities, other securities representing interests in or obligations backed by pools of mortgage loans, residential mortgage loans and mortgage servicing rights. Its business objective is to generate net income for distribution to its stockholders and optimize its returns through prudent management of its diversified investment strategies. The Company's three investment groups are comprised of the following: Annaly Agency Group, Annaly Residential Credit Group, Annaly Mortgage Servicing Rights Group.
<h3>Key Indicators: Annaly Capital Management's Financial Health</h3>
Market Capitalization Analysis: The company's market capitalization is above the industry average, indicating that it is relatively larger in size compared to peers. This may suggest a higher level of investor confidence and market recognition.
Negative Revenue Trend: Examining Annaly Capital Management's financials over 3 months reveals challenges. As of 30 June, 2024, the company experienced a decline of approximately -78.02% in revenue growth, reflecting a decrease in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Financials sector.
Net Margin: Annaly Capital Management's net margin lags behind industry averages, suggesting challenges in maintaining strong profitability. With a net margin of -97.19%, the company may face hurdles in effective cost management.
Return on Equity (ROE): The company's ROE is below industry benchmarks, signaling potential difficulties in efficiently using equity capital. With an ROE of -0.48%, the company may need to address challenges in generating satisfactory returns for shareholders.
Return on Assets (ROA): Annaly Capital Management's ROA is below industry averages, indicating potential challenges in efficiently utilizing assets. With an ROA of -0.05%, the company may face hurdles in achieving optimal financial returns.
Debt Management: Annaly Capital Management's debt-to-equity ratio is below the industry average. With a ratio of 1.82, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.
<h2>Analyst Ratings: What Are They?</h2>
Experts in banking and financial systems, analysts specialize in reporting for specific stocks or defined sectors. Their comprehensive research involves attending company conference calls and meetings, analyzing financial statements, and engaging with insiders to generate what are known as analyst ratings for stocks. Typically, analysts assess and rate each stock once per quarter.
Some analysts will also offer forecasts for metrics like growth estimates, earnings, and revenue to provide further guidance on stocks. Investors who use analyst ratings should note that this specialized advice comes from humans and may be subject to error.
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Critical Insights From Annaly Capital Management Analyst Ratings: What You Need To Know

Wells Fargo analyst Donald Fandetti upgrades Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) from Equal-Weight to Overweight and raises the price target from $19 to $23.

Upgrades

Price Target

Wells Fargo Upgrades Annaly Capital Management to Overweight, Raises Price Target to $23

Mortgage rates continue to <a href="https://www.benzinga.com/news/24/09/40921345/mortgage-rates-drop-to-2-year-low-refinancing-hits-fastest-pace-since-2022-rocket-lendingtree-among">fall toward 6%</a> as the housing market absorbs the Federal Reserve&#8217;s 0.5% rate cut on Wednesday, raising demand for refinancing and buying, stated Freddie Mac.
The average rate for a 30-year fixed mortgage fell to 6.09% on Thursday, down from 6.2% a week ago and 7.19% a year earlier, according to Freddie Mac&#8217;s Primary Market Mortgage Survey.
The rate for a 15-year fixed mortgage declined to 5.15%, down from 5.27% a week ago and 6.54% a year earlier.
"Mortgage rates continued declining towards the six percent mark, reviving purchase and refinance demand for many consumers," said Sam Khater, Freddie Mac's chief economist.
Read Also:<a href="https://www.benzinga.com/top-stories/24/09/40923657/single-family-housing-starts-are-up-as-mortgage-rates-decline-fed-eyes-lower-rates"> Single-Family Housing Starts Are Up As Mortgage Rates Decline, Fed Eyes Lower Rates</a>
"While mortgage rates do not directly follow moves by the Federal Reserve, this first cut in over four years will have an impact on the housing market. Declining mortgage rates over the last several weeks indicate this cut was mostly baked in, but we expect rates to fall further, sparking more housing activity."
Exchange-traded funds that hold mortgage stocks are sensitive to mortgage rates because they primarily invest in mortgage-backed securities (MBS) or mortgage-related assets, which are directly impacted by changes in interest rates.
<ul>
<li>IShares Mortgage Real Estate ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/REM#BATS">REM</a>) rose 0.82%</li>
<li>VanEck Mortgage REIT Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MORT#NYSE">MORT</a>) went up 0.74%</li>
<li>IShares MBS ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MBB#NASDAQ">MBB</a>) ticked up 0.06%</li>
</ul>
IShares Mortgage Real Estate ETF holds 15.2% of the REIT, Annaly Capital Management, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>), while VanEck Mortgage REIT Income ETF holds 11.1%.
Read Now:
<ul>
<li><a href="https://www.benzinga.com/markets/24/09/40817001/mortgage-rates-fall-to-lowest-level-since-february-2023">Mortgage Rates Fall To Lowest Level Since February 2023</a></li>
</ul>
Photo: Shutterstock

AGNC Investment Corp. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/agnc#NASDAQ">AGNC</a>) is in the limelight with the Federal Reserve&#39;s decision to begin an interest rate cut this month. The Fed has kept its influential lending rate at its highest level at 5.25-5.50% since 2001 to tame inflation. The inflation has been gradually cooling down.
On Aug. 23, Fed Chairman Jerome Powell stated that the central bank has &quot;ample room&quot; to maneuver as policy enters its next phase. He stressed that the timing and speed of reduction will &quot;depend on incoming data.&quot; With this, as per the CME Fedwatch tool, the market participants are now predicting a 61% chance of a 50 basis point rate cut this month compared with a 26% chance predicted a month ago.
AGNC is one of the mortgage real estate investment trust (mREIT) stocks burdened by the higher-interest-rate environment. With an improving market scenario and rate cut around the corner, investors are turning optimistic about AGNC stock. In the past six months, the shares of AGNC stock have rallied 15.5% compared with the industry&#39;s growth of 6%.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/55/76589.jpg?v=1463796336" />
Image Source: Zacks Investment Research
The stock is also trading above the 50-day SMA, representing a bullish trend.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/01/76583.jpg?v=1226237945" />
Image Source: Zacks Investment Research
In the current situation, should investors scoop up AGNC Investment stock? Before making any hasty decision, it would be prudent to take a look at the reasons behind the surge, the stock&#39;s growth prospects as well as risks (if any).
<h2>How Rate Cut Benefits AGNC?</h2>
AGNC&#39;s financials have been adversely impacted since early 2022, when the Fed first began its interest rate hiking cycle. The negative return and falling profitability raised concerns about the company&#39;s Investment&#39;s capacity to sustain its high-yielding payment.
At the end of the six months ended June 30, 2024, AGNC&#39;s interest income grew 54% compared with the six months ended June 30, 2022, thanks to higher rates on its MBS portfolio. However, its borrowing costs rose significantly, as interest expenses ballooned from $107 million to $1.4 billion during the same period. As a result, this mREIT had a net interest loss of $33 million at the end of six months ended June 30, 2024, against $763 million of net interest income registered at the end of six months ended June 30, 2022.
As long-term bond yields have declined with the Fed&#39;s decision of an interest rate cut, this resulted in a decline in mortgage rates. The average rate on the 30-year fixed-rate mortgage dropped to 6.35% as of Aug. 29 from 6.46% a week ago. A year ago, the metric averaged 7.18%.
As rate cuts begin, it will likely increase net interest spreads. This will ease earnings pressure for AGNC, as it is currently reeling under high funding costs. This will help the company to increase its dividend payout.
Also, the company has solid access to attractive funding across a broad spectrum of counterparties and financing conditions. As a result, it has flexibility in the opportunistic enhancement of its portfolio. AGNC Investment&#39;s liquidity as of June 30, 2024, including cash and unencumbered Agency assets, was $5.3 billion. This should alleviate some concerns about its capacity to maintain its payout.
High rates also impacted the book value of AGNC&#39;s investments due to &quot;spread risk.&quot; From June 30, 2022, to June 30, 2024, the company&#39;s book value per share has declined 36.8%.
Nonetheless, the long-term outlook for Agency mortgage-backed securities (MBS) looks favorable. Agency MBS spreads have remained in a range that supports positive long-term risk-adjusted returns for leveraged investors like AGNC. At these levels, Agency MBS provides a significant incremental yield over both U.S. Treasuries and investment-grade corporate paper, which will continue to drive demand for Agency MBS. Given the favorable supply-demand dynamic for Agency MBS and the improving monetary policy outlook, the prospects for AGNC look favorable.
<h2>AGNC&#39;s Impressive Payout</h2>
This publicly traded mREIT offers a lucrative dividend yield.
As the expected rate cut will support AGNC&#39;s financials, the company can continue to pay dividends to its shareholders.
Income-seeking investors have a large appetite for REIT stocks, as U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends. As for AGNC, the company has a record of paying monthly dividends.
AGNC&#39;s current dividend yield is 14.01%. This is impressive compared with the industry&#39;s average of 11.2% and attracts investors as it represents a steady income stream.
AGNC is not the only dividend-paying stock among Zacks Industry &ndash; REIT and Equity Trust. Stocks like Annaly Capital Management (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nly#NYSE">NLY</a>) and Ellington Credit Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/earn#NYSE">EARN</a>) are also providing investors with solid dividend options.
NLY has an annual dividend yield of 12.9%, while EARN has a dividend yield of 13.9%.
Coming back to AGNC, dividends aside, it has a share repurchase plan in place. In 2022 and 2021, AGNC Investment repurchased 4.7 million shares and 17.7 million shares for $51 million and $281 million, respectively. With no repurchases done in 2023 and the first half of 2024, $1 billion remained under this program for repurchase through Dec. 31, 2024. It plans to buy back shares only when the repurchase price is lower than the then-current estimate of tangible net book value per common share. The buyback program will enable it to respond to the volatility in its stock and boost shareholders&#39; wealth.
<h2>Factors to Consider Before Choosing AGNC</h2>
The ultra-high dividend yield and regular payout look eye-catching for most investors watching for high-income funds. However, in April 2020, AGNC slashed its dividend to 12 cents per share from 16 cents and continued to pay the same amount in later periods. Also, the company has a history of cutting its dividend.
Further, any volatility in the mortgage market, unfavorable changes in the shape of the yield curve, interest-rate volatility and deterioration of the generic financial conditions may affect the performance of the company&#39;s investments.
Also, analyst seems to be bearish about AGNC. Over the past 60 days, the Zacks Consensus Estimate for 2024 and 2025 earnings has moved downward.
Estimate Revision Trend
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/b3/76579.jpg?v=474796960" />
Image Source: Zacks Investment Research
<h2>Unlocking Valuation for AGNC</h2>
From a valuation standpoint, AGNC Investment appears expensive relative to the industry. The company is currently trading at a discount with a forward 12-month Price-to-Tangible Book (P/TB) multiple of 1.16X, above the industry average of 0.99X.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/9d/76581.jpg?v=1910096254" />
Image Source: Zacks Investment Research
The stock is more expensive than its peer, NLY&#39;s current forward 12-month P/TB of 1.06X. AGNC is trading at a discount to EARN&#39;s current forward 12-month P/E of 0.96X.
<h2>Should You Make a Bet on AGNC Now?</h2>
The Fed&#39;s adjustment in monetary policy should benefit AGNC. A rate-cutting cycle should boost its net interest spread and the book value of its portfolio. That could be a strong tailwind for the company in the upcoming period.
However, volatility in the mortgage market, unfavorable changes in the shape of the yield curve, and deterioration of the generic financial conditions may affect the AGNC&#39;s performance. Moreover, the company has a track record of lowering dividends during stressful times.
To conclude, investors interested in AGNC should wait for a better entry point, considering its premium valuation. They should analyze the upcoming interest rate changes and market volatility closely for a more appropriate entry point. The stock&#39;s Zacks Rank #3 (Hold) supports our thesis.
<a href="https://www.zacks.com/stock/news/2331645/fed-rate-cut-round-the-corner-should-you-make-a-bet-on-agnc-stock?cid=CS-BENZ-FT-analyst_blog|most_popular_stocks-2331645">To read this article on Zacks.com click here.</a>

JMP Securities analyst Steven Delaney reiterates Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) with a Market Perform.

Reiteration

JMP Securities Reiterates Market Perform on Annaly Capital Management

Arbor Realty Trust (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/abr#NYSE">ABR</a>) &mdash;&nbsp; a multi-family mREIT company &mdash;&nbsp; is in the limelight with the recent decline in mortgage rates. Mortgage rates fell to their lowest level in over a year, a positive development for the housing market.&nbsp;
With a market capitalization of $2.54 billion, ABR is trading below its 50-day simple moving average and above its 200-day SMA. In June 2024, a bullish &lsquo;Golden Cross&#39; formed as the 50-day moving average crossed above the 200-day moving average.
<h3>50-Day &amp; 200-day Moving Average</h3>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/d6/74328.jpg?v=410047765" style="height:310px; width:600px" />
Image Source: Zacks Investment Research
In the past six months, the stock has gained 9.7% compared with the industry&#39;s growth of 0.8%.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/ec/74325.jpg?v=2018541680" style="height:178px; width:620px" />
Image Source: Zacks Investment Research
ABR consistently attracts investors looking for high-yield companies. However, concerns related to market volatility might be a concern.&nbsp;
Currently, the stock is down 17.4% from its 52-week high of $16.35. Is now the right time to invest? To answer this, it&#39;s essential to delve into the details and evaluate various factors at play.
<h3>Arbor Realty: High-Income REIT Stock</h3>
This New York-headquartered REIT primarily focuses on originating and servicing loans for multi-family, single-family, and other commercial real estate assets. Mortgage REITs tend to be more volatile than equity REITs because they are tied to interest rates, but the high yields make them appealing to watchful investors.&nbsp;
Income-seeking investors have a large appetite for REIT stocks, as U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends. As for ABR, the company has a record of paying monthly dividends.
The company has a track record of paying a quarterly dividend of 43 cents. ABR&#39;s current dividend yield is 12.86%. This is impressive compared with the industry&#39;s average of 11.6% and attracts investors as it represents a steady income stream.
ABR is not the only dividend-paying stock among Zacks Industry &ndash; REIT and Equity Trust. Stocks like Annaly Capital Management (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nly#NYSE">NLY</a>) and Ellington Credit Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/earn#NYSE">EARN</a>) are also providing investors with solid dividend options.
NLY has an annual dividend yield of 13.2%, while EARN has a dividend yield of 14.3%.
<h3>Mortgage Rate Decline: A Positive Development</h3>
Long-term bond yields have declined due to expectations that the Federal Reserve will cut interest rates in September. This resulted in a decline in mortgage rates. The average rate on the 30-year fixed-rate mortgage dropped to 6.47% as of August 8 from 6.73% a week ago. A year ago, the metric averaged 6.96%.
Housing affordability challenges are expected to decline with lower mortgage rates. With rates trending lower and balanced supply/affordability playing out in the mortgage market, demand is set to increase in the coming days. With this turnaround, mortgage originations will likely witness a positive trend. This will reduce operational and financial challenges for mREITs like Arbor Realty and increase the gain on sale margin and new investment activity.
Also, rate cuts beginning in September will likely increase net interest spreads. This will ease earnings pressure for the ABR as it is facing rising funding costs. This will help the company to increase its dividend payout, which might look attractive to investors.
<h3>Q2 Result Not Impressive</h3>
ABR&#39;s financial results were subdued in second-quarter 2024. The company reported quarterly earnings of 45 cents per share, lower than 57 cents in the year-ago quarter. It posted revenues of $297.19 million in the second quarter, down 11.5% year over year.
<h3>Estimates Trend</h3>
Analysts&#39; estimates have likely reflected these headwinds, with Arbor Realty&#39;s distributable earnings per share expected to decline 21.3% in 2024 and 1.9% in 2025, intimidating the sustainability of its dividends.&nbsp;
In the past month, the Zacks Consensus Estimate for 2024 has moved marginally upward, while 2025 earnings have moved downward, reflecting analysts&#39; mixed sentiments.
<h3>Estimate Revision Trend</h3>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/53/74319.jpg?v=1546554145" />
Image Source: Zacks Investment Research
<h3>Near-term Concerns</h3>
ABR&#39;s credit risk has increased rapidly of late. As of Jun 30, 2014, the company reported a credit loss allowance of $238.9 million compared with $169 million reported in the same period of last year.
The company is also witnessing a rise in non-performing loans. As of Jun 30, 2024, it had 24 non-performing loans with an unpaid principal balance (UPB) of $676.2 million before related loan loss reserves of $28.1 million. This compared with 21 loans with a UPB of $464.8 million, before loan loss reserves of $32.9 million as of Mar 31, 2024.
<h3>Lofty Valuation</h3>
From a valuation standpoint, ABR Investment appears expensive relative to the industry. The company is currently trading at a stretched valuation with a forward 12-month P/TB multiple of 1.13X, above the industry average of 0.92X.
<h3>Price-to-Book TTM</h3>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/89/74320.jpg?v=1402100419" style="height:118px; width:620px" />
Image Source: Zacks Investment Research
The stock is also trading at a premium compared with its peers. NLY and EARN have current forward 12-month P/E of 1.02X and 0.96X, respectively.
<h3>Consider Waiting for a Better Entry Point</h3>
The ultra-high dividend yield and high payout look eye-catching for most investors watching for high-income funds. Also, interest rate cuts will turn out to be favorable for ABR over the long term.
Yet, any volatility in the mortgage market, unfavorable change in the shape of the yield curve and deterioration of the generic financial conditions may affect the performance of the company&#39;s investments. Also, Its credit risk trajectory raises concerns with rapid growth in credit loss allowance and delinquent loans.
Also, the company&#39;s stretched valuation looks pricey compared with industry and peers.
Considering the pros and cons, we can conclude that investors should refrain from rushing to buy ABR right now, just banking on its lucrative dividend. Instead, they should analyze the upcoming interest rate changes and the mortgage market closely for a more appropriate entry point. The stock&#39;s Zacks Rank #3 (Hold) supports our thesis.
<a href="https://www.zacks.com/stock/news/2322159/should-you-buy-arbor-realty-abr-stock-as-mortgage-rates-fall?cid=CS-BENZ-FT-analyst_blog|most_popular_stocks-2322159">To read this article on Zacks.com click here.</a>

AGNC Investment Corp. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/agnc#NASDAQ">AGNC</a>) stock rallied 11.8% in the past three months. The company&#39;s shares have outpaced the 7.6% rally registered by the industry it belongs to and 9.2% growth of the Zacks S&amp;P 500 composite.
<h3>Three Months Price Performance</h3>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/c4/73108.jpg?v=2012552605" />
Image Source: Zacks Investment Research
This publicly-traded mortgage real estate investment trust (mREIT) company offers favorable long-term stockholder returns with a huge dividend yield, which may compel many investors to buy the stock. However, the stock experienced some headwinds in the second quarter of 2024, which might raise concerns about its dividend sustainability.
Currently, the stock is trading 5% down from its 52-week high of $10.57 hit on Jul 17. Is now the right time to invest? To answer this, it&#39;s essential to delve into the details and evaluate various factors at play.
<h3>Q2 Result: A Shift in Momentum</h3>
AGNC Investment&#39;s financial results dipped in the second quarter. The company reported a comprehensive loss of 13 cents per share against 48 cents of comprehensive income registered in the first quarter. Net spread and dollar roll income of 53 cents was down from 58 cents in the previous quarter.
Meanwhile, AGNC&#39;s tangible book value per share fell 5%. This reduction, together with dividend payments of 36 cents for the quarter, resulted in a negative 0.9% economic return on tangible common equity for the period.
The negative return and falling profitability may raise worries about AGNC Investment&#39;s capacity to sustain its high-yielding payment. The company&#39;s leverage ratio increased from 7.1 in the first quarter to 7.4 in the second quarter, which could exacerbate concerns. Despite this, the company concluded the period with strong liquidity of $5.3 billion, which should alleviate some concerns about its capacity to maintain its dividend in the short term.
<h3>Impressive Payout</h3>
Income-seeking investors have a large appetite for REIT stocks, as U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends. As for AGNC, the company has a record of paying monthly dividends.
AGNC&#39;s current dividend yield is 15.1%. This is impressive compared with the industry&#39;s average of 10.3% and attracts investors as it represents a steady income stream.
AGNC is not the only dividend-paying stock among Zacks Industry &ndash; REIT and Equity Trust. Stocks like Annaly Capital Management (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nly#NYSE">NLY</a>) and Ellington Credit Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/earn#NYSE">EARN</a>) are also providing investors with solid dividend options.
NLY has an annual dividend yield of 13.1%, while EARN has a dividend yield of 13.7%.
Coming back to AGNC, dividends aside, it has a share repurchase plan in place. In 2022 and 2021, AGNC Investment repurchased 4.7 million shares and 17.7 million shares for $51 million and $281 million, respectively. With no repurchases done in the first half of 2024, $1 billion remained under this program for repurchase through Dec 31, 2024. It plans to buy back shares only when the repurchase price is lower than the then-current estimate of tangible net book value per common share. The buyback program will enable it to respond to the volatility in its stock and boost shareholders&#39; wealth.
<h3>Favorable Long-Term Outlook</h3>
AGNC Investment primarily focuses on leveraged investments in Agency residential mortgage-backed securities. That includes residential mortgage pass-through securities and collateralized mortgage obligations. A U.S. Government agency or a U.S. Government-sponsored enterprise&nbsp;guarantees the principal and interest payments for such investments.
AGNC Investment borrows against its investment portfolio under a master repurchase agreement, which provides short-term financing. The company expects to make a profit and pay the dividend from the net interest income (NII), which is the difference between interest earned on investments and its cost of borrowing.
The long-term outlook for Agency MBS remains favorable. Agency MBS spreads have remained in a range that supports positive long-term risk-adjusted returns for leveraged investors like AGNC. At these levels, Agency MBS provides a significant incremental yield over both US Treasuries and investment-grade corporate paper, which will continue to drive demand for Agency MBS. Given the positive supply-demand dynamic for Agency MBS and the improved monetary policy outlook, both the present returns and future prospects for AGNC look favorable.
<h3>2024 Estimates Down</h3>
Over the past month, the Zacks Consensus Estimate for 2024 and 2025 earnings has moved downward, reflecting analyst bearish sentiments.
<h3>Estimate Revision Trend</h3>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/2b/73107.jpg?v=1376659545" />
Image Source: Zacks Investment Research
<h3>Unlocking Valuation</h3>
From a valuation standpoint, AGNC Investment appears inexpensive relative to the industry. The company is currently trading at a discount with a forward 12-month P/E multiple of 4.95X, significantly below the industry average of 8.44X. The stock is also significantly cheaper than its peer NLY and EARN current forward 12-month P/E of 7.41X and 6.65X, respectively.
<h3>Price-to-Earnings (Forward 12 Months)</h3>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/5a/73109.jpg?v=872049456" />
Image Source: Zacks Investment Research
<h3>Consider Waiting for a Better Entry Point</h3>
The ultra-high dividend yield and regular payout look eye-catching for most investors watching for high-income funds. However, AGNC slashed its dividend to 12 cents from 16 cents in April 2020 and continued to pay the same amount in later periods. The company also has a history of cutting its dividend.
AGNC uses leverage to scoop returns and give dividends to investors, which act as an advantage and a disadvantage for the company, depending on the market scenario. Increasing interest rates may have two drawbacks. As a leveraged corporation, the company finds it challenging to hedge its portfolio due to unstable and fluctuating interest rates. Also, high rates enable it to enhance its portfolio yield by investing in mortgages with higher interest rates.
At the recently concluded two-day FOMC meeting, the Federal Reserve left the interest rates unchanged at a 23-year high of 5.25%-5.50%. Per the press conference following the meeting, the central bank has kept the doors open for the September rate cut. With the inflation numbers cooling down, market participants are expecting more cuts this year. This will turn out to be favorable for AGNC.
Yet, any volatility in the mortgage market, unfavorable change in the shape of the yield curve, interest-rate volatility and deterioration of the generic financial conditions may affect the performance of the company&#39;s investments. In the past two years, there has been significant volatility in the financial markets. The increase in interest rates resulted in higher debt servicing costs and underperformance of fixed-income assets.
Considering the pros and cons of AGNC, we can conclude that investors should refrain from rushing to buy AGNC right now, just banking on its lucrative dividend. Instead, they should analyze the upcoming interest rate changes and the mortgage market closely for a more appropriate entry point. The stock&#39;s Zacks Rank #3 (Hold) supports our thesis.
<a href="https://www.zacks.com/stock/news/2314516/agnc-investment-agnc-up-11-8-in-3-months-is-it-worth-buying?cid=CS-BENZ-FT-analyst_blog|most_popular_stocks-2314516">To read this article on Zacks.com click here.</a>

AGNC Investment Up 11.8% in 3 Months: Is It Worth Buying?

Compass Point analyst Merrill Ross maintains Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) with a Buy and raises the price target from $22 to $23.5.

Compass Point Maintains Buy on Annaly Capital Management, Raises Price Target to $23.5

Jones Trading analyst Jason Weaver maintains Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) with a Buy and maintains $21 price target.

Jones Trading Maintains Buy on Annaly Capital Management, Maintains $21 Price Target

Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) reported quarterly earnings of $0.68 per share which beat the analyst consensus estimate of $0.65 by 4.62 percent. This is a 5.56 percent decrease over earnings of $0.72 per share from the same period last year. The company reported quarterly sales of $1.177 billion which beat the analyst consensus estimate of $1.075 billion by 9.47 percent. This is a 27.73 percent increase over sales of $921.494 million the same period last year.

Earnings Beats

Annaly Capital Management Q2 2024 Adj EPS $0.68 Beats $0.65 Estimate, Sales $1.177B Beat $1.075B Estimate

AGNC Investment Corp.&#39;s (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/agnc#NASDAQ">AGNC</a>) second-quarter 2024 net spread and dollar roll income per common share (excluding estimated &quot;catch-up&quot; premium amortization benefit) of 53 cents matched the Zacks Consensus Estimate. However, the bottom line declined from the 67 cents reported in the previous quarter.
Adjusted net interest and dollar roll income of $482 million moved down from $496 million in the previous quarter.
The company reported a second-quarter comprehensive loss per common share of 13 cents against comprehensive income per common share of 48 cents reported in the prior quarter.
<h3>Inside the Headlines</h3>
Net interest expenses were $3 million compared with $30 million in the prior quarter. The Zacks Consensus Estimate was pegged at $404 million.
AGNC Investment&#39;s average asset yield on its portfolio was 4.69% in the second quarter, up from 4.56% reported in the prior quarter.
The combined weighted average cost of funds, inclusive of interest rate swap, was 2% compared with 1.58% in the prior quarter.
The average net interest spread (excluding estimated &quot;catch-up&quot; premium amortization benefits) was 2.69%, down from 2.98% in the previous quarter.
As of Jun 30, 2024, AGNC&#39;s average tangible net book value &quot;at risk&quot; leverage ratio was 7.2X compared with 7X in the prior quarter.
In the second quarter, the company&#39;s investment portfolio bore an average actual constant prepayment rate of 7.1%, up from 5.7% in the previous quarter.
As of Jun 30, 2024, tangible net book value per common share (BVPS) was $8.40, down from $8.84 as of Mar 31, 2024.
The economic return on tangible common equity was negative 0.9% compared with 5.7% in the previous quarter. This included a dividend per share of 36 cents and a decline of 44 cents in tangible net BVPS.
As of Jun 30, 2024, the company&#39;s investment portfolio aggregated $66 billion. This included $59.7 billion of Agency mortgage-backed securities, $5.3 million of net forward purchases of Agency MBS in the to-be-announced market, and $1 billion of credit risk transfer and non-Agency securities and other mortgage credit investments.
As of Jun 30, 2024, AGNC Investment&#39;s cash and cash equivalents totaled $530 million, up from $505 billion as of Mar 31, 2024.
<h3>Dividend Update</h3>
In the second quarter, AGNC Investment announced a dividend of 12 cents per share each for April, May and June. Management declared $13.4 billion in common stock dividends or $47.92 per share since its initial public offering in May 2008 through the second quarter of 2024.
<h3>Conclusion</h3>
AGNC&#39;s second-quarter results benefited from an increase in asset yields. To navigate the monetary policy transition, the company has defensively positioned itself with prudent asset-selection efforts and timely portfolio adjustment. However, lower net interest spread and increased weighted average cost of funds acted as headwinds.
<div class="chart_embed">
<h3>AGNC Investment Corp. Price, Consensus and EPS Surprise</h3>
<img alt="AGNC Investment Corp. Price, Consensus and EPS Surprise" src="https://staticx-tuner.zacks.com/images/charts/59/1721740775.png" style="height:265px; width:576px" title="" />
AGNC Investment Corp. price-consensus-eps-surprise-chart | AGNC Investment Corp. Quote
</div>
AGNC Investment currently carries a Zacks Rank #3 (Hold).
<h3>Upcoming Release Dates of Other REITs</h3>
Annaly Capital Management, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nly#NYSE">NLY</a>) is slated to announce second-quarter 2024 results on Jul 24.
Over the past month, the Zacks Consensus Estimate for NLY&#39;s quarterly earnings has remained unchanged at 66 cents per share, indicating an 8.3% decline from the prior-year reported figure.
Starwood Property Trust, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/stwd#NYSE">STWD</a>) is slated to post quarterly results on Aug 6.
Over the past month, the Zacks Consensus Estimate for STWD&#39;s quarterly earnings has been unchanged at 48 cents per share, indicating a decline of 2.04% from the prior-year quarter&#39;s reported figure.
<a href="https://www.zacks.com/stock/news/2307210/agnc-investment-agnc-q2-earnings-meet-asset-yield-improves?cid=CS-BENZ-FT-analyst_blog|earnings_article-2307210">To read this article on Zacks.com click here.</a>

STWD

AGNC Investment Q2 Earnings Meet, Asset Yield Improves

Annaly Capital Management's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) short percent of float has risen 9.72% since its last report. The company recently reported that it has 10.50 million shares sold short, which is 2.37% of all regular shares that are available for trading. Based on its trading volume, it would take traders 2.2 days to cover their short positions on average.
<h3>Why Short Interest Matters</h3>
Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.
Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.
See Also: <a href="https://www.benzinga.com/short-interest">List of the most shorted stocks</a>
<h3>Annaly Capital Management Short Interest Graph (3 Months)</h3>
<img src="https://www.benzinga.com/files/images/story/2024/1721158216_0.png" alt="short_fig" />
As you can see from the chart above the percentage of shares that are sold short for Annaly Capital Management has grown since its last report. This does not mean that the stock is going to fall in the near-term but traders should be aware that more shares are being shorted.
<h3>Comparing Annaly Capital Management's Short Interest Against Its Peers</h3>
Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.
According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, Annaly Capital Management's peer group average for short interest as a percentage of float is 7.86%, which means the company has less short interest than most of its peers.
Did you know that increasing short interest can actually be bullish for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/">This post by Benzinga Money explains how you can profit from it.</a>
This article was generated by Benzinga's automated content engine and was reviewed by an editor.

Short Sellers

Short Ideas

Peering Into Annaly Capital Management's Recent Short Interest

JP Morgan analyst Richard Shane maintains Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) with a Overweight and raises the price target from $20 to $21.

JP Morgan Maintains Overweight on Annaly Capital Management, Raises Price Target to $21

Annaly Capital Management, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nly#NYSE">NLY</a>) is benefiting from an improvement in the average yield on interest-earning assets. The company&#39;s prudent asset selection will drive its performance. However, the current market volatility and interest rate fluctuations are near-term worries. Additionally, the company&#39;s dividend reduction and an unutilized share repurchase program highlight concerns regarding capital distribution.
NLY&#39;s investment strategy is driven by the prudent selection of assets and effective allocation of capital to achieve stable returns. The company&#39;s investment strategy involves traditional Agency mortgage-backed securities (MBS), which provide downside protection, as well as investments in more non-agency and credit-focused asset classes that aid in enhancing returns. Also, a scaled MSR platform will continue to benefit from a low prepayment environment. As of Mar 31, 2024, its investment portfolio aggregated $87.5 billion.
Further, the company is focused on diversifying its investment portfolio. The company seeks to stabilize and diversify its investment portfolio through investing in Agency MBS and residential credit. NLY&#39;s strong liquidity position enables it to reinvest in the franchise. In 2022, it sold its Middle Market Lending portfolio and exited its commercial real estate business. Through these exits, Annaly was able to enhance capabilities across its core housing finance strategy.
Further, Annaly is focusing on improving its liquidity and reducing leverage. The company showcased a strong liquidity position in the first quarter of 2024. The company maintains an unencumbered asset portfolio, aggregating $5.3 billion, which can readily provide liquidity in times of adverse market conditions. Hence, with a decent balance sheet, the company is well-equipped to support its business, even in times of economic stress and market volatility.
NLY enjoys a diverse funding profile in the industry. Its main sources of financing are repurchasing agreements and various forms of equity. Arcola Securities, its wholly-owned subsidiary, enters repurchase contracts on behalf of the company. This helps it enjoy flexibility in the opportunistic enhancement of its portfolio. Annaly maintains a strong presence in the residential securitization market through its residential credit business. This will enable the company to capitalize on the improving outlook for residential mortgage finance. This will support Annaly&#39;s asset generation strategy.
Shares of Annaly have declined 2.7% over the past six months compared with the industry&#39;s decline of 11.1%.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/32/70760.jpg?v=435863113" />
Image Source: Zacks Investment Research
At present, Annaly carries a Zacks Rank #3 (Hold).
The operating performances of mREITs depend on conditions prevalent in the broader financial markets and the macroeconomic situation. Any volatility in the mortgage market, unfavorable changes in the shape of the yield curve, interest-rate volatility and deterioration of the generic financial conditions may affect the performance of the company&#39;s investments. The Federal Reserve kept its key interest rate unchanged and scaled back its forecast from three rate cuts to just one this year after an inflation pickup in early 2024. This might not serve as a good indicator for the company.
Annaly&#39;s capital distribution plans keep us apprehensive. In January 2022, it was authorized with a $1.5-billion share repurchase plan, valid through Dec 31, 2024. However, the company has not repurchased shares under this plan since the announcement. Moreover, it slashed its first-quarter 2023 cash dividend by 26% to 65 cents per share due to a moderation in earnings available for distribution. Earlier, amid the pandemic-led market volatility, Annaly slashed its second-quarter 2020 dividends by 12% to 22 cents in June 2020.
<h3>Stocks to Consider:</h3>
A couple of better-ranked stocks are Ellington Credit Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/earn#NYSE">EARN</a>) and Chimera Investment Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cim#NYSE">CIM</a>).
Earnings estimates of Ellington Credit Company have been revised upward by 2% over the past 60 days. In the past six months, EARN&#39;s shares have gained 13.4%. Currently, the company carries a Zacks Rank #1 (Strong Buy).
Earnings estimates for Chimera Investment Corporation have been revised upward by 14.6% for 2024 over the past 60 days. Shares of CIM have gained 6.7% over the past three months. Currently, the company carries a Zacks Rank #2 (Buy).
<a href="https://www.zacks.com/stock/news/2298603/annaly-s-nly-diversification-efforts-aid-amid-market-volatility?cid=CS-BENZ-FT-analyst_blog|zer_report_update-2298603">To read this article on Zacks.com click here.</a>

Annaly's Diversification Efforts Aid Amid Market Volatility

Correction: Janney Montgomery Scott analyst Jason Stewart initiates coverage on Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) with a Buy rating. Price Target removed

Initiation

Correction: Janney Montgomery Scott Initiates Coverage On Annaly Capital Management with Buy Rating. Price Target removed

Janney Montgomery Scott analyst Jason Stewart initiates coverage on Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) with a Buy rating and announces Price Target of $21.

Janney Montgomery Scott Initiates Coverage On Annaly Capital Management with Buy Rating, Announces Price Target of $21

Annaly Capital Management's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) short percent of float has fallen 5.86% since its last report. The company recently reported that it has 9.24 million shares sold short, which is 2.09% of all regular shares that are available for trading. Based on its trading volume, it would take traders 2.62 days to cover their short positions on average.
<h3>Why Short Interest Matters</h3>
Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.
Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.
See Also: <a href="https://www.benzinga.com/short-interest">List of the most shorted stocks</a>
<h3>Annaly Capital Management Short Interest Graph (3 Months)</h3>
<img src="https://www.benzinga.com/files/images/story/2024/1716304520_0.png" alt="short_fig" />
As you can see from the chart above the percentage of shares that are sold short for Annaly Capital Management has declined since its last report. This does not mean that the stock is going to rise in the near-term but traders should be aware that less shares are being shorted.
<h3>Comparing Annaly Capital Management's Short Interest Against Its Peers</h3>
Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.
According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, Annaly Capital Management's peer group average for short interest as a percentage of float is 7.71%, which means the company has less short interest than most of its peers.
Did you know that increasing short interest can actually be bullish for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/">This post by Benzinga Money explains how you can profit from it.</a>
This article was generated by Benzinga's automated content engine and was reviewed by an editor.

(NLY) - Analyzing Annaly Capital Management's Short Interest

JonesTrading analyst Jason Weaver maintains Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) with a Buy and maintains $21 price target.

JonesTrading Maintains Buy on Annaly Capital Management, Maintains $21 Price Target

Annaly Capital Management (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) reported quarterly earnings of $0.64 per share which met the analyst consensus estimate. This is a 20.99 percent decrease over earnings of $0.81 per share from the same period last year. The company reported quarterly sales of $1.09 billion which beat the analyst consensus estimate of $1.02 billion by 7.30 percent. This is a 33.76 percent increase over sales of $818.25 million the same period last year.

Annaly Capital Management Q1 Adj $0.64, Inline, Sales $1.09B Beat $1.02B Estimate

Annaly Capital Management's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NLY#NYSE">NLY</a>) short percent of float has risen 9.5% since its last report. The company recently reported that it has 9.70 million shares sold short, which is 2.19% of all regular shares that are available for trading. Based on its trading volume, it would take traders 2.88 days to cover their short positions on average.
<h3>Why Short Interest Matters</h3>
Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.
Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.
See Also: <a href="https://www.benzinga.com/short-interest">List of the most shorted stocks</a>
<h3>Annaly Capital Management Short Interest Graph (3 Months)</h3>
<img src="https://www.benzinga.com/files/images/story/2024/1713897014_0.png" alt="short_fig" />
As you can see from the chart above the percentage of shares that are sold short for Annaly Capital Management has grown since its last report. This does not mean that the stock is going to fall in the near-term but traders should be aware that more shares are being shorted.
<h3>Comparing Annaly Capital Management's Short Interest Against Its Peers</h3>
Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.
According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, Annaly Capital Management's peer group average for short interest as a percentage of float is 6.83%, which means the company has less short interest than most of its peers.
Did you know that increasing short interest can actually be bullish for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/">This post by Benzinga Money explains how you can profit from it.</a>
This article was generated by Benzinga's automated content engine and was reviewed by an editor.

A Summer To Remember

3 Stocks That Can Thrive Through Recession

Rithm Capital's Updated Sector Comparative Analysis - Part 1 (Includes Recommendation For 19 Peers As Of 9/2/2024)

BKT: Not An Attractive Entry Point After The Decrease In Rates (Rating Downgrade)

Annaly Capital Management declares $0.65 dividend

Assessing Annaly Capital's Performance For Q2 2024

SA Asks: Will a Fed rate cut impact market seasonality?

Bill Gross says US10Y should be 3.75%, based on 2.5% inflation and new dot plot

In a report released today, Donald Fandetti from Wells Fargo upgraded Annaly Capital (NLY – Research Report) to a Buy, with a price target of $23.0...

Positive Report for Annaly Capital (NLY) from Wells Fargo

Annaly, AGNC Investment upped, Claros, ACRE, Velocity cut at Wells Fargo

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Press Releases

Annaly Capital Management, Inc. Announces 1st Quarter 2024 Common Stock Dividend of $0.65 per Share

Annaly Capital Management, Inc. Announces Dates of First Quarter 2024 Financial Results and Conference Call

Annaly Capital Management, Inc. Reports 1st Quarter 2024 Results

Annaly Capital Management, Inc. Announces Preferred Dividends

Annaly Capital Management, Inc. Announces 2nd Quarter 2024 Common Stock Dividend of $0.65 per Share

Annaly Capital Management, Inc. Publishes Fifth Corporate Responsibility Report

Annaly Capital Management, Inc. Announces Dates of Second Quarter 2024 Financial Results and Conference Call

Annaly Capital Management, Inc. Reports 2nd Quarter 2024 Results

Annaly Capital Management, Inc. Announces 3rd Quarter 2024 Common Stock Dividend of $0.65 per Share

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Annaly Capital Management

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